M/s. Karat 87 Hotels Pvt. Ltd., Delhi V. ACIT, New Delhi

ITA 6400/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3360 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D , NEW DELHI BEFORE SH. BHAVNESH SAINI , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO S. 6399 & 6400 /DE L/ 2014 ASSESSMENT YEAR S : 2008 - 09 & 2009 - 10 M/S. KARAT 87 HOTELS PVT. LTD., A - 1, CC - COLONY, OPP. R.P. BAGH, DELHI VS. ACIT, CENTRAL CIRCLE - 12, NEW DELHI PAN : AADCK2600A ( APPELLANT ) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH. AMIT JAIN, SR.DR DATE OF HEARING 07.02.2018 DATE OF PRONOUNCEMENT 15.02.2018 ORDER PER O.P. KANT , A. M. : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST ORDER PASSED BY THE LD. COMMISSIONER OF INCOME - TAX ( APPEALS) - XXXI, NEW DELHI , [ IN SHORT THE LD. CIT - (A) ] FOR ASSESSMENT YEAR S 2008 - 09 AND 2009 - 10 RESPECTIVELY IN RELATION TO PENALTY UNDER SECTION 271(1)(B) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT ) OF RS. 10,000 EACH. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT IN BOTH THE CASES , THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 143(2)/142(1) OF THE ACT ON 09/10/2012, BUT NONE ATTENDED ON BEHALF OF THE ASSESSEE ON SAID DATE. IN VIEW OF NON - COMPLIANCE, THE ASSESSING OFFICER 2 ITA NOS.6399 & 6400/DEL/2014 IS SUED NOTICE UNDER SECTION 271(1 ) ( B) OF THE ACT ON 29/01/2003 FIX ING THE DATE OF HEARING ON 04.02. 2003, WHICH WAS ALSO NOT COMPLIED. THE NON - COMPLIANCE OF THE PENALTY NOTICE ISSUED RESULTED IN LEVY OF PENALTY OF RS. 10,000 / - BY THE ASSESSING OFFICER. AGGRIEVED THE ASSESSEE , FILED APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED THAT COMPLIANCE OF THE NOTICES COULD NOT BE MADE FIRSTLY DUE TO MRS. ANJU GUPTA, DAUGHTER - IN - LAW OF THE PRINCIPAL OFFICER OF THE ASSESSEE COMPANY WAS SUFFERING FROM SEVERE DISEASE AND HAD TO BE HOSPITALIZED ON 06/10/2012 AND SECONDLY, THE PRINCIPAL OFFICER OF THE COMPANY SH . SATYA PRAKA SH GUPTA WAS ALSO HOSPITALIZED DUE TO HEART ATTACK ON 09/10/2012. THUS, IT WAS SUBMITTED BEFORE THE LEARNED CIT - ( A ) THAT IN VIEW OF THE FACTS, THE WHOLE FAMILY WAS DISTURBED AND , THEREFORE , THERE WAS NO COMPLIANCE. BEFORE THE LD. CIT - ( A ) , APPEALS AGAINST L EVY OF PENALTY OF RS. 10,000 / - EACH UNDER SECTION 271(1)(B) OF THE ACT IN FOUR ASSESSMENT YEARS WERE PEN DING . THE LD. CIT - A EMPHASIZED THE IMPORTANCE OF COMPLIANCE OF THE NOTICES ISSUED BY THE ASSESSING OFFICER , AND AFTER TAKING INTO ACCOUNT FACTS AND CIRC UMSTANCES OF THE CASE, CONFIRMED PENALTIES OF RS. 10,000 EACH ONLY FOR TWO OUT OF FOUR ASSESSMENT YEARS INVOLVED . THUS , PENALTY TO THE EXTENT OF RS. 10,000 EACH FOR ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 WERE CONFIRMED AND PENALTY OF RS. 10,000 / - EACH FOR ASSE SSMENT YEAR S 2010 - 11 AND 2011 - 12 WERE DELETED. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. WHEN THE APPEAL WAS CALLED FOR HEARING, NONE ATTENDED ON BEHALF OF THE ASSESSEE AND , THUS , WE PROCEEDED TO HEAR THE APPEAL EX PARTY QUA THE ASSESSEE. 3 ITA NOS.6399 & 6400/DEL/2014 4. THE LD. SR. DR APPEARING ON BEHALF OF THE R EVENUE SUBMITTED THAT THE LD. CIT - ( A ) WAS JUSTIFIED IN CONFIRMING THE PENALTY FOR TWO OUT OF FOUR ASSESSMENT YEARS. 5. WE HAVE HEARD THE SUBMISSION OF THE LD. SR. DR, HOWEVER , NOT CONVINCED WITH HIS SUBMISSION. WE FIND THAT SECTION 273B OF THE ACT HAS PROVIDED THAT NO PENALTY SHALL BE IMPOSED UNDER SECTION 271 OF THE ACT , IF T HE PERSON PROVES THAT THERE WAS A RE ASONABLE CAUSE FOR SAID FAILURE . IN THE CA SE , THE ASSESSEE HAS EXPLAINED THE REASONABLE CAUSE FOR NON - COMPLIANCE OF THE NOTICES ISSUED. IT WAS EXPLAINED BY THE ASSESSEE THAT DUE TO HOSPITALIZATION OF THE DAUGHTER - IN - LAW OF THE PRINCIPAL OFFICER AND THE PRINCIPAL OFFICER HIMSELF, HEARINGS OF ASSESS MENT PR OCEEDINGS COULD NOT BE ATTENDED . THE REASONS OF NON - COMPLIANCE EXPLAINED IN ALL THE FOUR ASSESSMENT YEARS ARE IDENTICAL , W HEREAS THE LD. CIT - ( A ) CONFIRMED THE PENALTY IN TWO ASSESSMENT YEARS BUT DELETED IN OTHER TWO A SSESSMENT YEARS. IN OTHER WORDS, IN TWO ASSESSMENT YEARS, THE LD. CIT - ( A ) HAS FOUND THE EXPLANATION OF CAUSE OF FAILURE TO ATTEND THE ASSESSMENT PROCEEDINGS AS REASONABLE AND JUSTIFIED WHEREAS IN THE OTHER REMAINING TWO ASSESSMENT YEARS , HE DID NOT FIND SAME AS JUSTIFIED. IN OUR OPINION, THE ACTION OF THE LD. CIT - ( A ) IS ARBITRARY AND WITHOUT ANY SOUND REASONS. IF THE CAUSE OF NON - COMPLIANCE OF NOTICES BY THE ASSESSEE IS FOUND TO BE REASONABLE AND JUSTIFIED IN TWO ASSESSMENT YEARS, THEN CONSISTENCY DEMANDS THAT SAME EXPLANATION SHOULD BE A CCEPTED AS JUSTIFIED IN OTHER TWO ASSESSMENT YEARS ALSO AND NO LEVY OF PEN ALTY WAS WARRANTED. ACCORDINGLY , WE SET ASIDE THE ORDER OF THE LD. CIT - ( A ) AND DIRECT THE ASSESSING OFFICER TO D ELETE THE PENALTY LEVIED OF RS. 10,000 / - 4 ITA NOS.6399 & 6400/DEL/2014 EACH IN BOTH THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. ACCORDINGLY , THE GROUNDS RAISED IN BOTH THE APPEALS ARE ALLOWED. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 1 5 T H FEB . , 201 8 . S D / - S D / - ( BHAVNESH SAINI ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 5 T H FEBRUARY , 201 8 . RK / - (D.T.D) COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI